Correlation Between Alfa Financial and GoldMining
Can any of the company-specific risk be diversified away by investing in both Alfa Financial and GoldMining at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Alfa Financial and GoldMining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alfa Financial Software and GoldMining, you can compare the effects of market volatilities on Alfa Financial and GoldMining and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Alfa Financial with a short position of GoldMining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alfa Financial and GoldMining.
Diversification Opportunities for Alfa Financial and GoldMining
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Alfa and GoldMining is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Alfa Financial Software and GoldMining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GoldMining and Alfa Financial is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Alfa Financial Software are associated (or correlated) with GoldMining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GoldMining has no effect on the direction of Alfa Financial i.e., Alfa Financial and GoldMining go up and down completely randomly.
Pair Corralation between Alfa Financial and GoldMining
Assuming the 90 days trading horizon Alfa Financial Software is expected to generate 0.67 times more return on investment than GoldMining. However, Alfa Financial Software is 1.49 times less risky than GoldMining. It trades about 0.12 of its potential returns per unit of risk. GoldMining is currently generating about -0.05 per unit of risk. If you would invest 19,980 in Alfa Financial Software on August 29, 2024 and sell it today you would earn a total of 2,020 from holding Alfa Financial Software or generate 10.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 65.12% |
| Values | Daily Returns |
Alfa Financial Software vs. GoldMining
Performance |
| Timeline |
| Alfa Financial Software |
| GoldMining |
Alfa Financial and GoldMining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alfa Financial and GoldMining
The main advantage of trading using opposite Alfa Financial and GoldMining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alfa Financial position performs unexpectedly, GoldMining can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in GoldMining will offset losses from the drop in GoldMining's long position.| Alfa Financial vs. Samsung Electronics Co | Alfa Financial vs. Samsung Electronics Co | Alfa Financial vs. Toyota Motor Corp | Alfa Financial vs. Reliance Industries Ltd |
| GoldMining vs. Lendinvest PLC | GoldMining vs. Neometals | GoldMining vs. Coor Service Management | GoldMining vs. Albion Technology General |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
Other Complementary Tools
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |